Types of condo insurance coverage
To ensure your condo has full protection, consider two types of insurance. The first is the master condo policy, which your homeowners association will generally manage.[1] This policy covers the entire building structure, including common areas like hallways, elevators, and the roof.
The master condo policy also provides some coverage for the structure of your condo unit, which usually fits into one of the following categories:
All-in: The master condo policy covers all interior finishes such as windows, cabinets, and floor coverings. You’re responsible for paying the deductible on the insurance policy.
All-in excluding improvements: The master condo policy is responsible for covering the unit’s original interior and exterior features but doesn’t cover any changes or upgrades you’ve made to your unit.
Bare walls coverage: The condo policy covers damages outside of your condo unit. This includes damage to the roof, possibly your windows, and the carpets in the condo’s common areas. You’re responsible for all interior finishes.[2]
The second type of insurance is an individual policy that’s your responsibility to purchase. This policy covers your personal possessions and any structural elements the master condo policy doesn’t cover.
If you’re shopping for condominium insurance, it’s important you’re aware of the different types of coverage that help ensure your condo has the proper protection. Here’s what you should know about each of these coverage types.
Building property coverage
Building property coverage is dwelling coverage for condos. It insures all the permanent structures in your condo that the master condo policy doesn’t cover. This includes any installations or alterations you’ve made to your condo.
For example, if you’ve added hardwood flooring, a built-in bookcase, upgraded appliances, or new light fixtures, building property coverage includes protection for it. Since you don’t own the entire condo building, your personal building property coverage won’t cover things like your roof or the outer walls of your condo. Instead, the master condo insurance should cover these things.
Building property coverage doesn’t insure property damage to your personal belongings. This requires a separate type of coverage. It also doesn’t cover damages outside your condo. That’s what the master condo policy is for.
You can check with your condo association to confirm exactly what the master policy covers and what you require coverage for.
Personal property coverage
Also known as contents coverage, personal property coverage insures all your belongings inside your condo, such as your clothing, furniture, bike, and computer, if a covered peril damages or destroys them.
Many condo insurance policies have a dollar limit that the policy covers, so you’ll want to check if the cost of your belongings exceeds your coverage. If you have expensive items such as family heirlooms or jewelry, you can ask about adding an endorsement to your policy to increase the coverage limit.
Liability coverage
Liability coverage protects you if someone hurts themselves while inside your condo and you’re found legally responsible. The master condo policy will typically provide coverage if a visitor hurts themselves in a common area. You can consider umbrella liability coverage as a cost-effective way to get more liability protection.
Loss of use coverage
If your condo is destroyed or damaged by a fire, or another covered peril that makes it uninhabitable, loss of use coverage pays for you to live somewhere else temporarily. Also known as additional living expenses coverage, this insurance pays for your accommodations and food when you’re unable to live in your condo.
Loss assessment coverage
Loss assessment coverage is an add-on you can include with your condo insurance policy to pay for damages to common areas in your condo complex. While your condo’s master insurance policy will typically pay for damages to common areas, you might have to pay a special assessment fee if the insurance policy isn’t large enough to cover all the damage or the deductible is too high. Loss assessment coverage prevents money from coming out of your pocket in these situations.
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